Wednesday October 1, 05:31 PM
UPDATE 1-European cenbank CBGA gold sales record low -council
LONDON, Oct 1 (Reuters) - Sales of gold under the Central Bank Gold Agreement (CBGA) in the year to September 26 were provisionally estimated at a record low 357.2 tonnes, the World Gold Council said on Wednesday.
Sales in the final year of the pact could be lower still, the WGC added. Under the terms of the CBGA, signatories can sell up to 500 tonnes of gold per year.
'Looking ahead to the final year of the agreement and taking account of known plans and past selling patterns, sales are likely to remain relatively low,' the WGC said in a statement.
'Unless a major new seller emerges, gold sales during year 5 could even be lower than year 4.'
Financial market instability and fluctuations in the dollar are making gold are more attractive as a reserve asset for central banks, analysts said.
'With the financial turmoil we are seeing, central banks would rather hold onto their gold,' Calyon metals analyst Robin Bhar said.
The Swiss National Bank was the biggest seller within the CBGA in the fourth year of the current pact, selling 137 tonnes of gold. Switzerland said earlier this week that it will make no further sales during the current agreement.
France was the next heaviest seller, with sales to the end of August totalling 106.8 tonnes.
The CBGA agreement was created in 1999 to keep a lid on central bank gold sales and stabilise prices.
Fifteen banks, including the European Central Bank, Swiss National Bank and Germany's Bundesbank, signed up to a second version of the pact, which runs from 2004 to 2009.
According to the figures provided by the WGC, the 15 signatories to the accord disposed of 497.2 tonnes of the 500 -tonne allowance during 2004-05, 395.8 tonnes the following year and 475.8 tonnes in 2006-07.
(Reporting by Jan Harvey; editing by Michael Roddy) Keywords: GOLD CENBANK SALES
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